Procedural Safeguards Mandatory For Stigmatic Termination Even In Contractual Employment: Chhattisgarh HC

Chhattisgarh High Court: A Single Judge Bench of Justice Amitendra Kishore Prasad ruled that stigmatic termination of contractual employees requires adherence to procedural safeguards and natural justice principles. The court set aside the termination order of a Gram Rojgar Sahayak, and ruled that allegations of misconduct necessitate a proper inquiry and fair hearing even in contractual employment. Background Yaad Das Sahu was appointed as a Gram Rojgar Sahayak (GRS) under MGNREGA on a contractual basis in 2016. His employment tenure, initially for one year, was repeatedly extended due to his satisfactory work. In December 2022, certain local officials and an MLA, Daleshwar Sahu, accused Yaad Das Sahu of behavioral issues and professional misconduct. An inquiry was initiated, but neither the complaints nor the inquiry report was shared with him, despite multiple requests. Soon, Sahu was accused of falling short of the mandated man-day targets and failing to meet certain benchmarks at work. Multiple show-cause notices were issued, that alleged poor performance and misconduct. Despite Sahu providing responses, he was transferred to a different Panchayat. A month later, on June 23, 2023, his services were terminated without notice or a formal inquiry. Aggrieved, Sahu filed a writ petition and challenged the termination order. Arguments Sahu's counsel, Mr. K.N. Nande, argued that the termination was illegal as no notice or inquiry was provided. He stated that the allegations in the preliminary inquiry report too were unsubstantiated. Further, the termination order was stigmatic, and tarnished Sahu's reputation. He argued that even in a contractual role, termination requires procedural safeguards as outlined in Swati Priyadarshini v. State of Madhya Pradesh (2024 SCC OnLine SC 2139). Counsel Mr. Akhilesh Kumar, representing the Panchayat authorities, argued that Sahu was consistently warned about his underperformance. The termination was lawful under the terms of his contractual appointment, which permitted removal with one month's notice. The authorities denied that the order was stigmatic, and argued that it was administrative and not punitive. Court's Reasoning Firstly, the court examined the contractual nature of Sahu's employment. It noted that while contractual employees lack certain protections under service rules, stigmatic termination still requires adherence to certain fair procedure. Referring to Swati Priyadarshini, the court pointed out that orders imposing stigma must follow a proper inquiry and allow the employee an opportunity to defend themselves. Secondly, the court explained the events leading to the termination. It found that the inquiry report from December 2022 exonerated Sahu. Despite this, the court noted that allegations resurfaced without any additional evidence. The court ruled that the termination order that alleged disobedience and negligence was stigmatic, as it carried penal consequences. Further, the court dismissed the argument that the contract only required one month's notice before termination. It clarified that termination premised on misconduct is a punitive action, and it requires following procedural safeguards. Lastly, the court noted that Sahu was not provided copies of complaints or inquiry findings despite repeated requests. It ruled that this rendered the termination arbitrary and illegal. The court concluded that even for contractual roles, a termination order could not have been issued without an inquiry or hearing. Thus, the court allowed the writ petition and set aside the termination order dated June 23, 2023. It directed the authorities to reinstate Sahu with all consequential benefits. However, the court granted liberty to the authorities to conduct a fresh inquiry, if required. Date Decided: 03.01.2025 Neutral Citation: 2025:CGHC:517 | Yaad Das Sahu v. State of Chhattisgarh Counsel for Yaad Das Sahu: Mr. K.N. Nande Counsel for the State and Panchayat Authorities: Mr. Akhilesh Kumar for Respondents 4 and 5; Mr. Prateek Tiwari, Panel Lawyer, for the State.Citation: 2025 LiveLaw (Chh) 5 Click Here To Read/Download The Order

Procedural Safeguards Mandatory For Stigmatic Termination Even In Contractual Employment: Chhattisgarh HC

Pranav Kumar

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